Fatwa No : 90770

Investing in a company which has some usurious transactions

Fatwa Date : Shawwaal 21, 1426 / 22-11-2005

Question

I participated in the IPO for "Dlalah" in DohaQatar, I recently sold my stock, and collected the check for the earnings (I have yet to cash the check). I have been told that participating in this company is Haraam, because 4 of the major local banks that deal with interest have ownership stakes in it (each bank has 3 percent of the shares).

The question is, what is Islam's take on the above situation, and if participating in the IPO for Dlalah was Haraam, wouldn't trading in any of the other companies in the stock market be as 'Haraam'? Considering that most of these companies have ties with banks that deal with interest?

Moreover, if this money is Haraam money, what would be the best way to dispense of it? Can I be used to pay off a loan? Or pay for my education? Or be given to my family who live elsewhere? Please advise.

Answer

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad , is His slave and Messenger.

First of all, you have to know, dear brother, that if the main purpose of this company is forbidden, like dealing with Ribaa (usury or interest) or producing forbidden goods, or trading in forbidden goods, then it is forbidden to invest in it, and the scholars do not differ in this issue. It is also not permissible to invest in this company if it sometimes deals with Ribaa in some of its transactions, or invests some of its money in banks which deal with Ribaa, or lends money with Ribaa. This is the most preponderant opinion and the one that Islamweb adopts. The Islamic Fiqh (Jurisprudence) Committee in his fourteenth conference held in Makkah issued the same ruling.

Therefore, it is not permissible to invest in the mentioned company which deals in such transactions. Moreover, it is an obligation to get rid of any profits obtained from this on the poor or in the general public interest of the Muslims. Also, it is not permissible for you to use the profit in your own interest like paying off a debt or paying school fees, unless you are a poor person - in which case you are only permitted to take your need, and it is not permissible to give this profit to your family unless they are poor.